The Safe Withdrawal Rate Series

One of the most important topics in financial planning is how to transform an initial portfolio into a safe and sustainable retirement income stream. I’ve put a lot of thought into this topic and published 60+ posts on my blog. To make my research more accessible, I created this “landing page” for everyone interested in my Safe Withdrawal Rate Series.

Should you read from the beginning to the end? Just because I wrote this comprehensive series in this order doesn’t mean that one should read it in that order. Keep in mind that this whole series was a learning experience for me as well, so reading parts 1 through the end will seem a bit jumpy at times. In fact, a lot of the posts came about because readers suggested I check out certain sub-topics, and all that came about in random order. If I were to write this series again today, from scratch, with everything I know today, or if I were to write a book, I would obviously structure this very differently. It would be unfair to new readers to make them go through the entire series! This convinced me to write this new page so newcomers feel less intimidated starting their own thought process on Safe Withdrawal Rates!

How do I even get started with the Safe Withdrawal Rate Series?

Great question! If you’re completely new to FIRE, maybe start with The Basics of FIRE as an introduction to Financial Independence and Early Retirement.

If you have already graduated from the FIRE basics, you will likely look for insights on sustainable withdrawal rate calculations. When I was at that point, I wrote Part 1 – Introduction: This post sets the stage and explains the similarities and differences between my study and the Trinity Study. I replicate some of the Trinity Study results but also generalize the results to make them applicable to the FI/FIRE crowd; most importantly, I look at longer retirement horizons. If you have already read the Trinity Study, you are already skeptical about the simple naive 4% Rule, and you like technical stuff, then sure, start with this one. But to make this series more accessible, palatable, and enjoyable to a wider audience, I also wrote some high-level posts without much technical and math mumbo jumbo. Maybe you read those first to get an appetite:

  • Without diving into any math, you might enjoy these two as your first post: Part 26 – Ten Things the Makers of the 4% Rule Don’t Want You to Know and Part 50 – Ten Things the “Makers” of FIRE Don’t Want You to Know. As the titles suggest, these are tongue-in-cheek posts where I debunk some of the myths surrounding FIRE and the 4% Rule.
  • If you attended the April 2018 CampFI in Virginia, where I was one of the presenters, you’d recognize much of the material in Part 27 – Why is Retirement Harder than Saving for Retirement?: Another more philosophical, not-so-technical post, perfectly suited for folks trying to get started. Probably you’ve heard about MMM’s Shockingly Simple Math and JL Collins’ Simple Path to Wealth. But the simplicity of accumulating assets can’t be so easily extrapolated into the withdrawal stage. That phase is much more complicated, and the reason why I have written so many parts on this topic!
  • Part 32 – You are a Pension Fund of One (or Two). Compare and contrast our personal challenges to those of large corporate and public pension funds. I found many aspects of running my own (early) retirement finances – essentially a pension fund with two beneficiaries – that are much more complex than running a pension fund for thousands of beneficiaries!
  • New to the site here? Do you think that rigor and math don’t belong in retirement planning? Why not just wing it? In Part 46, I detail my thought process and why I like to perform my careful, customized, and rigorous retirement withdrawal simulations, not despite but exactly because we face so many uncertainties in retirement. But we don’t have to overdo the precision either! In the follow-up post, Part 47, I go through a few case studies and show when it’s OK to wing it and when it’s time to worry about those nitty-gritty details of the withdrawal rate analysis.
The Safe Withdrawal Rate Series

OK, after the intro, what else would you want to read? Maybe you found interesting sub-topics and relevant links already when reading through Part 26 or Part 50. But I also present all the remaining posts as they fall into several major themes. And don’t worry; I also give a few suggestions on what to read when at what stage in your FIRE journey later in the summary below…

Introduction to Sequence of Return Risk

Why are we even worried about running out of retirement money? Over the long haul, the stock market should return much more than 4%. And a retirement horizon of 30 years for a traditional retiree and 50+ years for an early retiree certainly qualifies as long-run, right? Well, not so fast! I learned from my historical simulations that you can still run out of money even if your 30-year or even 50-year average return was above your withdrawal rate. If returns were bad enough initially and you keep withdrawing through the bear market, there is a chance you will deplete your investment portfolio so severely that even the subsequent bull market and recovery will not save you – the sequence of returns matters. Low returns early on are poison to your retirement finances. It’s the opposite of Dollar-Cost Averaging; you sell more shares when prices are down!

So, no series on Safe Withdrawal Rates would be complete without at least some treatment of Sequence of Return Risk (sometimes also called “Sequence Risk”). That’s what I do in Part 14 and Part 15. I go through some numerical examples, first with “made up” return data and then with actual historical market data to showcase how detrimental Sequence Risk can be. None of this is required reading for a successful (early) retirement, but it’s a nice reference to have!

Also, you might check out my podcast appearances on the topic. All really low-tech with no math degree required:

A question I keep getting: Is there ever a time when we can stop worrying about Sequence Risk? Unfortunately, Sequence Risk will be with you for longer than the often-quoted 5-10 years. See Part 38 for details.

One “solution” I hinted at in 2017: If a saver and retiree could team up where retirement income and retirement savings exactly balance each other so that their aggregate cash flows look like a Buy-and-Hold investor, we could certainly eliminate Sequence Risk. See Part 53. But there are certainly some bureaucratic hurdles to setting up what looks like a P2P pension fund.

The effect of Supplemental Cash Flows (Social Security, Pensions, etc.) on Safe Withdrawal Rates

Social Security and other (almost) guaranteed income in retirement, like pensions and annuities, can greatly enhance retirement security. But how much of a difference can a future payment make to today’s annual withdrawal amount? This is one of the key reasons why Safe Withdrawal Rate Rules are really only Rules of Thumb! We each need a personalized financial analysis to determine our sustainable withdrawal rate. A 30-year-old early retiree with relatively modest expected Social Security benefits many decades in the future has a lower safe withdrawal rate than a 50-year-old early retiree expecting generous Social Security benefits in only a little bit over a decade. How much of a difference does that all make? Well, I studied this in great detail, once in a really early post, Part 4, and then again in Part 17.

You can also use a tool I provide in Part 56 to evaluate the net present value (NPV), internal rate of return (IRR), and crossover (to profit) points of annuities, pensions, and Social Security strategies. I do this all from an actuarial point of view, independent of the withdrawal rate analysis. For example, we can debunk the popular myth that deferring Social Security yields an extra return of 8% a year. Once you factor in conditional survival probabilities, deferring benefits’ internal return on investment (IRR) is roughly in line with TIPS real interest rates. But healthy individuals with a higher-than-average life expectancy can push the real, inflation-adjusted IRR to 3% or more. Not quite a stock market return but for a guaranteed income investment, 3% plus inflation is quite attractive.

How would your Social Security Timing interact with Sequence Risk? I explore that issue in Part 59. There appears to be a persistent myth about claiming Social Security early to hedge against Sequence Risk. But alas, the historical worst-case scenarios (1929, 1964-1968) generated market drawdowns long enough that claiming benefits a few years earlier would not make a difference. Quite the opposite, claiming later and securing the maximum benefits for the long haul performed better in historical simulations.

Why the Trinity Study success/failure probabilities don’t easily apply to you and me

My main “beef” with the Trinity Study? Even if your personal financial situation exactly fits the model assumptions of the Trinity Study – a 30-year horizon and no additional cash flows – I’d not take the Trinity Study success probabilities very seriously for the following reasons:

  • Part 2 – Capital Preservation vs. Capital Depletion: Do you want to leave a bequest? Do you want to leave your entire principal intact instead of exhausting your nest egg? Then the 4% Rule may no longer be sustainable because it was designed with capital depletion in mind. This post looks into how much of a haircut it takes to make the 4% Rule water-tight again when you have a more aggressive final net worth target than $0.00! This post is also relevant for everyone planning a longer horizon than 30 years. Remember, the Trinity Study would consider a final net worth of $0.01 after 30 years a success. Not very useful if you have a 50-year horizon!
  • Part 3: Equity Valuation: After a 10-year-long equity bull market and high equity valuations (and low bond yields), you will face a higher failure probability with the 4% Rule than the Trinity Study may suggest. All failures of the naive 4% Rule occurred when the Shiller CAPE Ratio was elevated; see the chart below. But does that mean that I can’t retire at all? Do I have to wait until equity valuations “normalize” again? Not at all; I show that with a withdrawal rate in the 3.25-3.50% range, you would have survived even during the most catastrophic historical market conditions!
  • Part 6 – A 2000-2016 case study (Welcome to the Potemkin Retirement Village): Maybe you’ve heard/read that the year 2000 retirement cohort is doing just fine even in light of the deep bear markets in 2001-2003 and 2007-2009. That’s not exactly true, and I got the numbers to prove it! 
  • Part 22 – Can the “Simple Math” make retirement more difficult?: This is a post very relevant to folks in the FIRE community. If we all pull the plug and (early-)retire the minute we reach a certain savings target, e.g., 25x annual expenses, we could potentially face a much higher failure rate than what’s quoted in the Trinity Study. The Trinity Study calculates the unconditional probability of having randomly retired over the last century or so. But retiring conditional on reaching a savings target, often after a long bull market run, is a completely different ballgame. This is clearly related to Part 3, see above, but it’s still a new and unique angle!
From Part 50 of the SWR Series: Equity valuation (x-axis) vs subsequent 30-year safe withdrawal rates. Retirement cohorts 1926-1991, using return data 1926-2021.

Calculate your own personalized(!) Safe Withdrawal Rate with a free Google Sheet

What does all of this Safe Withdrawal research really mean for me personally? Nobody wants to read just a bunch of academic-style research on this topic. The problem I always had with the existing body of research, whether it’s from academics or practitioners, is that my personal financial situation looks completely different from their “model household.” I like to be able to make adjustments for my specific situation, for example…

  • A 50 or even 60-year horizon. Early retirees should model a very long retirement. The joint life expectancy of a couple retiring in their 30s or 40s necessitates a much longer horizon than the 30 or even 40 years often used in retirement calculators.
  • I like to be able to account for additional future cash flows, both positive (Social Security, a small pension, even a little bit of blogging income) and negative (college expenses for our daughter, higher healthcare costs when older, etc.).
  • Leave a bequest for our daughter when we pass.
  • Account for today’s expensive equity valuations.
  • Study the impact of investment fees.
  • etc.

So, I decided to publish the exact same Google Sheet I use myself (though not with my precise personal data) to gauge my personal Safe Withdrawal Rate using historical market data:

Link to the EarlyRetirementNow SWR Toolbox v2.0

The sheet uses past performance data, not Monte Carlo simulations. So, the simulation results reflect actual investment results that historical retirement cohorts would have experienced. The sheet may not be 100% self-explanatory, so please refer to Part 7 for the basic instructions. I also wrote Part 28 to explain all the enhancements added over the years! If the Google Sheet and all the options seem intimidating, my friends Jason and Eric at Two Sides of FI put together a video tutorial on YouTube explaining how to get started with this toolkit. You enter your initial portfolio value, asset allocations, additional future cash flows, etc., and then determine the sustainable withdrawal rates and retirement income using historical data going back 100+ years. And just for the record, the usual disclaimers apply here. Past performance is not guaranteed in the future. Actual investment results may vary!

As a supplementary tool, I also recommend you look at Part 33, where I look at how actuarial calculations may (or may not!) help determine sustainable withdrawal rates. There’s a free Google Sheet tool (link in the post) that uses pretty much the same inputs as in the SWR Toolbox.

For the mathematics geeks, I also provide a small mathematical appendix (Part 8). But again, this is the absolute last post you want to read unless you’re really into math and want to see where those formulas in the Google Sheet came from!

New in 2025: a web-based SWR simulation tool:

If you prefer a slightly less intimidating web-based simulation tool (no spreadsheet!), then please check out this project I started with a friend of mine:

SafeRetirementSpending.com

With this tool, you can replicate most of the functionality of the Google Sheet, but it’s all web-based. You can also save your parameters for future use and upload them again when you run the toolkit at a future date!

Asset Allocation Considerations to Optimize the Safe Withdrawal Rate

What is the appropriate portfolio mix in your investment portfolio? Clearly, the stock market offers the highest expected return in the long run, but due to Sequence Risk, you might also compromise your portfolio longevity if you invest too heavily in equities and face a deep bear market early in retirement. In my simulations, I find that a balanced portfolio somewhere between 60% and 80% stocks and the rest in intermediate (10-year) government fixed-income securities will thread the needle for most retirement portfolios. But the results will depend on your personal parameters, like your horizon and your bequest target. Please see Part 28 for details on how to start your own simulations to see the effect of your asset allocation on the various investment outcomes.

Gold?

How about exotic asset allocation strategies? In Part 34, I write about the impact of adding Gold. And it turns out that the safe-haven asset indeed alleviates Sequence Risk, precisely during the bad historical bear markets (1929, the 1970s). That said, some of the other heavily hyped, “sexy” asset allocation flavors like the “Permanent Portfolio,” “Risk Parity/All-Weather Portfolio,” and “Golden Butterfly Portfolio” not only don’t add value but sometimes even lower your sustainable withdrawal rate.

Small-Cap Value Stocks?

In Part 62, I write about Small-Cap Value stocks. Shifting away from the broad index and adopting this style is unlikely to significantly increase your safe withdrawal rate.

Can a high dividend yield generate better investment outcomes?

Part 29, Part 30, and Part 31 all deal with the widely held misconception that we can easily save the 4% Rule by increasing the dividend yield to a level close enough to your 4% annual withdrawal rate. Live off your dividend income, avoid ever selling your principal at depressed valuations, and shield your annual withdrawal amounts from Sequence Risk, right? It certainly sounds intuitive, and I was intrigued enough to research this option, hoping it could lower Sequence Risk. People in the FIRE community refer to it as “Yield Shield,” but this label is highly misleading because it doesn’t work reliably. It would have backfired badly during the 2007-2009 bear market and again in 2020. Instead of shielding yourself from the downturn, you would have aggravated the Sequence Risk. Sticking to a balanced portfolio, which includes both equity and bond index funds, is best.

Related to the “Yield Shield,” in Part 40, I look at how your retirement budget would have looked if we had lived off the dividends of an S&P 500 equity portfolio without ever touching the principal. This will not be a viable hedge against Sequence Risk for most retirees. Dividends are often stagnant or even cut during market downturns.

What’s my asset allocation recommendation, then? Keep it simple! An equity allocation between 60% and 80% and the rest in a safe fixed-income asset, e.g., Treasury Bonds, T-bills, etc., to diversify will work just fine.

Dealing with Market Volatility

Withdrawal strategies are never a one-time set-it-and-forget-it. You want to periodically monitor the retirement balance and market performance to see if your plan is still on track, especially once the stock market starts dropping. In the Spring of 2020, during the massive market volatility, I published Part 37, where I go through an example of how I would respond to the inevitable Bear Market.

Also, make sure you read Part 54, published during the 2022 bear market. If you find yourself in a downturn, your investment portfolio may be down, but due to more attractive equity valuations, your sustainable withdrawal rate will now be higher, offsetting at least a portion of the portfolio decline. Thus, your recommended retirement withdrawals may not even fall much. In other words, if you plan to retire during a steep stock market downturn and you multiply your initial portfolio value with the naive 4% Rule, you might seriously short-change your retirement income.

Can flexibility raise your sustainable withdrawal rate?

Why would I sit on my hands if I get unlucky in (early) retirement and my portfolio melts down year after year? If you stubbornly withdraw that same initial amount plus inflation adjustments, the way it’s modeled in the Trinity Study, it’s neither psychologically sustainable nor is it financially sound or mathematically optimal. Rather, everyone would change course at some point: either try to generate some supplemental income or consume less for a while (or a combination of the two). Flexibility is often sold as the panacea against Sequence Risk. I’m certainly not recommending everyone to be inflexible, but I’d argue that flexibility is often overrated:

  • Part 9 and Part 10: Under Guyton-Klinger Rules, you’d systematically lower your withdrawal amounts in response to significant underperformance of your portfolio. And if your portfolio recovers again, you ratchet up your withdrawals. Sounds very intuitive, and in some places, Guyton-Klinger-style rules are sold as the solution against Sequence Risk. But what’s often ignored is that GK Rules can take years, even decades, for your withdrawals (and your spending) to recover to the original level. So, while GK Rules are certainly a useful tool to prevent running out of money in retirement, there are some unpleasant and often hidden and unknown side effects!
  • Flexibility means that we’re using a dynamic and responsive withdrawal strategy. I might replace the risk of running out of money in the long term with very unpleasant short- to medium-term spending levels (see the GK research above!). In Part 11, I study what criteria I’d use to weigh different dynamic rules. Rules that take into account both your portfolio level and economic fundamentals (e.g. the Shiller CAPE) seem to make the most sense, which brings us to the next post…
  • … on one really elegant implementation of flexibility: Part 18, where you base the withdrawal amount on the Shiller CAPE Ratio. The advantage: the fluctuations in withdrawal amounts are muted relative to Guyton-Klinger. I also wrote a more in-depth post on flexible/dynamic CAPE-based withdrawal rates in Part 54.
  • Part 23: A reader suggested an intuitive way of dealing with Sequence Risk: If your portfolio balance falls below a certain threshold (e.g., 70% of initial), reduce your spending by, say, 30% (or work to make up the difference) until the portfolio recovers. I point out two serious concerns about this procedure: 1) in the really bad recessions that may imply 20+ years of reducing withdrawals, and 2) even in a not-so-bad bear market, you would have experienced a “false alarm,” i.e., you would have cut withdrawals for years only to find out – in hindsight(!)- that the portfolio would have survived without flexibility.
  • The problem with “flexibility” is that it’s so ambiguous. It’s like playing whack-a-mole; you think you debunked one flexibility scheme, and then people suggest another. So, in Part 24, I look at all the different “flexibility schemes” I could think of and test how they would have performed in historical bear markets. And just to be sure, I also solicited some additional reader suggestions in Part 25. Always with the same results: flexibility eliminates the risk of running out of money in 30 years but raises the risk of long and painful cuts in withdrawals in the short run and medium term! It’s like squeezing a balloon!
  • The kind of flexibility I like: If you’re flexible enough to put in One More Year, you can boost your retirement security substantially! See Part 42.
  • One could tie the withdrawals to the state of the equity market. Specifically, one could tighten the belt and reduce withdrawals when the stock market goes through a deep enough drawdown. In Part 58, I show that this approach has many serious flaws. You create very volatile annual withdrawal amounts and deep and lasting drawdowns of your retirement income.

I’m not saying that flexibility isn’t useful at all. Quite the opposite, in Part 58, I propose a better way of modeling flexibility in retirement to gauge how much of an impact you can make when you are willing and able to temporarily curb your withdrawals, either through spending cuts or a retirement income side hustle.

Alleviate Sequence Risk through Dynamic Asset Allocation! Easier said than done!

The holy grail in finance is tactically shifting your asset allocation to improve investment results. Unfortunately, the average retail investor will not have the ability to reliably time the ups and downs in equity and bond markets. But nevertheless, there are a few simple asset allocation paths that may partially hedge against Sequence Risk…

Prime Harvesting

Part 13 – Prime Harvesting: Many readers suggested this: We can alleviate (never eliminate!!!) Sequence Risk through a smarter, non-passive asset allocation to prevent selling equities through the bear market. Michael McClung suggested one such method in his book Living Off Your Money (paid link). I looked at that method and actually liked it quite a bit. Again, you won’t prevent Sequence Risk, but this is a way to alleviate it slightly!

Glidepaths

Though not identical, Prime Harvesting will likely look a lot like an equity glidepath in practice. The idea with a glidepath is that starting with a higher bond allocation initially gives you something of an insurance policy against Sequence Risk because you tend to mostly liquidate your bond holdings initially, right when Sequence Risk is most prevalent. Then, over time, you shift more into stocks when Sequence Risk becomes less of an issue. Thus, on average, you still have a balanced portfolio.

Also, notice that the shift from fixed-income securities to equities is not akin to what actively managed funds do. You don’t rely on proprietary signals. Instead, the shift occurs predictably as a function of time. I slightly prefer this approach over Prime Harvesting because it’s easier to keep track of. See Part 19 and Part 20!

I’m not a big fan of the “Safety First” approach, i.e., using safe assets like a TIPS ladder and/or an annuity in retirement. At least not exclusively. How about shifting a portion of our portfolio to Safety First assets? I studied that in Part 61. Qualitatively, this boils down to a glidepath again. It can alleviate but not eliminate Sequence Risk.

How about pre-retirement glidepaths? Please see Part 43. Investors with a high enough risk tolerance and some flexibility in their planned retirement date may keep an aggressive portfolio, even 100% equities, until their retirement accounts reach the target level.

Momentum/Trend-Following

In Part 63, I showcase simulations that indicate an active asset allocation strategy, which tactically shifts between four asset classes (equities, bonds, gold, and cash), could enhance your retirement safety. By avoiding the worst historical (equity) drawdowns, we can partially alleviate #SequenceRisk.

Bucket strategies

How about bucket strategies? Not really a panacea for Sequence Risk either, as I show in Part 48. Effectively, they have a lot of similarities with Glidepaths in retirement. But I found that the glidepath simulations looked slightly better than the bucket strategy results. In Part 55, I discuss this method with my FIRE blogging buddy Fritz Gilbert (Retirement Manifesto). Just like actively managed funds have trouble beating their benchmarks, shifting money around in buckets will not miraculously help you time the market. In the best possible case, a bucket strategy will be hit-or-miss. In the worst possible case, you underperform a passive asset allocation because of commissions and investment fees.

Can leverage raise your sustainable withdrawal rate?

How about using a margin loan to fund your retirement to avoid liquidating assets at an inopportune time? Part 49 deals with that. Part 52 provides more detail and examines how we can enhance results by carefully timing the use of leverage, specifically when to fund retirement from the margin loan and when to utilize portfolio withdrawals. The risk of using a margin loan is that if market performance is bad enough, you might face a margin call if you funded too much of your retirement budget with the loan. Besides, with interest rates still elevated while equity valuations are still expensive (as of November 2025), I’d probably stay away from margin loans for now.

How to account for taxes in safe withdrawal rate calculations

I haven’t written much about taxes until Part 35. It’s about planning your asset location (as opposed to asset allocation), i.e., what assets belong in what account types: taxable brokerage accounts vs. tax-free accounts (Roth IRAs, Health Savings Accounts) vs. tax-deferred retirement accounts (IRAs, 401(k), etc.). And in Part 44, I write about some general tax optimization principles. Part 45 has a case study and an Excel Toolkit I use for tax planning and optimization.

Special Topics

The impact of inflation on retirement withdrawals

How much of a difference would it make if you don’t have a perfectly flat withdrawal profile over time? Maybe skip the inflation adjustments? I look at that in Part 5 – Cost-of-Living Adjustments (COLA). Related to that, back in 2020, we found ourselves in a low-inflation environment. Due to the lower predicted COLA in that case, can we increase our sustainable withdrawal rate? Probably not, at least not by much. See Part 41! The opposite is true as well! In 2021 and early 2022, CPI inflation spiked. That doesn’t necessarily mean that we have to lower our SWR. See Part 51.

Homeownership and mortgages

Mortgages and (early) retirement don’t mix! In Part 21, I go through my rationale for paying off the mortgage before retirement: Having a fixed, inflexible payment like a mortgage is poison from a Sequence Risk perspective, especially with today’s high interest rates. That said, if you were lucky enough to lock in a 30-year mortgage interest rate at 3%, you likely want to keep that mortgage for now.

Accounting for homeownership in general: please see Part 57. A persistent myth in the personal finance community circulates, falsely claiming that homeowners enjoy a much higher withdrawal rate because they face less housing inflation than renters. I show that homeownership has a small positive effect on the sustainable withdrawal rate. However, the effect is quantitatively negligible.

How does Rental Real Estate fit into early retirement planning? How do we model safe withdrawal and safe consumption rates with a real estate portfolio? See Part 36 of the Series!

The Effect of the Rebalancing Frequency on Safe Withdrawal Rates

A critical practical concern for retirees: How often do you want to rebalance your portfolio? Can the rebalance strategy and frequency compound or alleviate Sequence Risk? See Part 39. My findings indicate that investment outcomes can differ slightly. On average, there may be an advantage in rebalancing only every 3-6 months, but it’s not guaranteed, and the average benefit is in the range of only 0.01%.

Summary and Suggestions

Withdrawing money from your nest egg is much more complicated than the “simple math” and “simple path” to accumulating assets. I can’t change that. But if you spend 10-15 years saving diligently to invest six-figure or even seven-figure sums, it may also be a wise “investment” to spend a few hours to familiarize yourself with the challenges of withdrawal strategies. Depending on where you are in your FIRE journey and your personal preferences, I’d suggest proceeding as follows:

  • A new reader, not even close to early retirement, just looking around: Start with Part 26 and Part 27. Don’t sweat any technical and more detailed posts linked there. But if something sparks your interest, check that out, too!
  • For the math geeks: Sure, add Part 1 (simulation details) and all the nitty-gritty details on Sequence Risk (Part 14, Part 15). And the mathematical appendix with formulas (Part 8) for the math pros!
  • Getting closer to retirement: You probably want to start looking into performing your own personal safe withdrawal simulations. I’d suggest you familiarize yourself with the Google Sheet and the two posts that explain how to use it (Part 7 and Part 28). Probably also check out Part 4 and Part 17 on how to treat supplemental cash flows. And getting closer to retirement in this day and age, you can’t escape the reality of expensive equity valuations, so you probably want to convince yourself that PE ratios (and CAPE ratios) have an impact on sustainable withdrawal rates: Part 3! 
  • I’d also urge every reader close to a “Lean-FIRE” retirement to check out some of the simulations in Part 23, Part 24, and/or Part 25. Can you stomach a multi-year (maybe even 20-year!) drought period with lower withdrawals? Lower than your already “bargain-basement budget?” If you don’t mind cutting your already optimized budget and/or doing a side hustle for that long then, sure, go ahead. But if you don’t, then maybe plan for a bit of a cushion, and don’t pull the plug the minute you reach 25x annual expenses!
  • For more adventurous, hands-on, and not 100% passive investors: Make sure you check out the dynamic asset allocation posts: Glidepaths (Part 19 and Part 20) and/or Prime Harvesting (Part 13). 

Just for your reference: all posts are listed in chronological order

Comments or questions?

Feel free to leave comments and suggestions here or at one of the specific SWR posts. I will receive a notification and try to respond, usually within a week. Also, comments with up to two external links are allowed. More external links might cause your comment to land in the spam box! 🙂 I look forward to your feedback!

Quik Links to Safe Withdrawal Posts

If you like to navigate across the different parts of the series, there is an easy way:

  • http://earlyretirementnow.com/swr is this landing page
  • http://earlyretirementnow.com/swrXY will get you part XY or the series, for example, the “swr01” suffix for part 1, “swr02” for part 2, etc.
  • Notice that parts 1-9 need to be entered as two digits with a “0” in front and the suffix, i.e., the “/swr” part is case sensitive, all lower letters!

Legal Stuff

My research is based on historical data. Past returns are no guarantee for future results. Please check the disclaimers.

Last updated: November 14, 2025

463 thoughts on “The Safe Withdrawal Rate Series”

  1. Hello ERN,
    I’ve noticed that selling covered calls is often suggested as a strategy to hedge against SORR, even in the comments for your posts here.
    Similar to the glidepath approach, the core idea is to trade off some average returns for improved performance in worst-case scenarios.
    It seems you haven’t analyzed this strategy in your series, likely due to a lack of data?
    While I don’t have specific data or analyses to quantify how much it could improve the SWR, I’d like to propose a framework for applying this strategy, using a concrete example:

    – Assumption: The portfolio size necessary for a failsafe retirement is $660K. Any amount above this threshold is nice to have, but offers diminishing utility.
    – Suppose your current portfolio is $600K.
    – You check the SPX option chain for a 1-year expiration and identify a strike price and premium combination that ensures the portfolio size will not exceed $660K by year-end.
    – SPX at this very moment is 5968. A 1-year call option with a strike price of 6250 has a premium of $320. Selling this call aligns with the goal.

    Why?
    1. If SPX ends at or above 6250 by year-end, the portfolio gains approximately 10% (4.73% from SPX growth + 5.33% from the premium). You’ve reached the $660K goal and are satisfied.
    2. If SPX ends below 6250, you retain the 5.33% premium which serves as a valuable hedge against SORR on the road ahead.

    When the strategy doesn’t apply?
    1. If you cannot find a strike+premium combination to bridge the gap to the failsafe amount.
    This will mostly manifest during the early and middle stages of the accumulation phase, but during these phases protection isn’t necessary and will do more harm than good.
    2. Portfolio already exceeds the failsafe amount. In this case, the strategy may be unnecessary.

    This strategy could also prove useful during retirement, especially in the following scenarios:
    1. You retired before reaching the failsafe amount and you aim to bridge the gap to becoming failsafe as quickly as possible.
    2. You retired with failsafe amount but market went down, and although theoretically you’re still failsafe (by definition), you want to simulate a new retirement with current conditions for added peace of mind.
    3. You decided to increase consumption beyond planned.

    While we lack concrete data, what are your thoughts on this approach? how would you intuitively compare this approach to the glidepath strategy?

    Reply

    1. True: selling covered calls hedges a bit against SoRR. Since I don’t have quotes on call options going back to 1871, I have never simulated that. But that shouldn’t keep us from using it in the future.
      Personally, I prefer using my options strategy where I generate about 4-5% extra without selling any of the upside of equities. That served me well since 2018. I would have kicked myself had I missed out on the big gains since 2018.

      Reply
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  13. Hi!

    I’m getting closer to my early retirement date and wanted to buy your book on safe withdrawal rates. I thought it would be the perfect read for winding down before bed! But to my surprise, I couldn’t find such a book.

    While chatting with ChatGPT, it suggested that I download your blog posts as PDFs to read on my tablet. It’s a great idea, and I’ll definitely do it, even though it’s a bit of a hassle. That said, have you considered creating a product—perhaps an eBook—for offline reading? I think it would be incredibly valuable to the community!

    Thanks for all your amazing work and insights!

    Reply

  14. Good day! Thank you for all your hard work. I’m working my way through the series. Question, your risk level spend rate chart has been shared a lot online. However I see here you updated the chart to include up to 2023. It shows a 75/25 is much “safer” then the original chart. I’m curious why such a difference, especially since bonds performed so poorly in 2022. I’m looking at a 50 year retirement and currently 85/15. I thought I’d be safe with 3%, however this updated chart makes me think I should move to more bonds with a higher fail safe number. I appreciate your thoughts when able. Thank you and take care.

    Reply

    1. Not sure what chart are you referring to. There are hundreds of charts in this series.

      Adding more data since 2022 has zero impact on the SWR because in the simulations, the 2020-2024 will show up at the end of the simulations, when, due to Sequence Risk, it has very little impact.

      Reply

  15. Karsten, firstly thank you for the excellent toolbox and education. Now two questions . For returns post 2016 you consider :

    ” Equity projected returns post 12/31/2016. These are real annualized return assumptions. In our SWR simulations we set this to 6.6% but here we are a bit more cautious and set this to a more conservative 5.0%.
    Bond returns: for the near-term (notice how low current 10Y yields are) and then longer-term. Short-term we use only 0.5% over the next ten years, then going a bit higher to 2.0% real return after that.
    Same for Cash: We expect pretty low cash returns over the next 10 years (0% real) and then a bit of a bump after that (+1% real). ”

    Are these still the current return assumptions in play ? THEN, if they were adjusted based on more recent data would they generate material changes to the analysis, working from a more recent starting point for drawdown ?

    Reply

    1. I update the asset returns about every 2-3 months, so we have returns until late 2024 in the SWR toolbox now.

      For the calibrated, extrapolated returns, I currently use 4% stocks and 1.5% bonds for the next 10y, then 5.5% and 2% after that respectively.
      The exact numbers don’t make any noticeable difference because these are just the simulation returns for years 40+ or even 50+ in some of the relevant worst-case cohorts.

      Reply

      1. Thank you Karsten for this incredibly useful tool! My wife and I are just beginning our retirement journey and I am using the SWR Toolbox as a main (though not only) planning tool.

        I’ve made some edits and added some tables and charts to my copy of the toolbox, so I’m wondering what is the most efficient way for me to get the latest Asset Returns without grabbing a new copy of the toolbox, which will not have my additions?

        Reply

        1. Ah… I just read your reply on 2/9/2025, which explains that the latest data will have little impact on the swr. Makes sense and thanks again!

          “Adding more data since 2022 has zero impact on the SWR because in the simulations, the 2020-2024 will show up at the end of the simulations, when, due to Sequence Risk, it has very little impact.”

          Reply

  16. I try to rebalance using my asset sales which gives a clear bias towards equities most of the time. The current correction triggered by tariff policy induced uncertainty has lead to me rebalancing largely for emotional reasons (I like things being neat and tidy). Do I need to be braver or given the modest differences resulting from different rebalancing strategies is it okay to rebalance when there is a correction?

    Reply

    1. I must be tired that wasn’t the question I intended to ask. Is the 10% drawdown SCR or the 0% failure SCR the best to use after a 10% correction?

      Reply

  17. Hello Big ERN!!

    Just to confirm, on the “CAPE-based Rule” tab, are the Minimum, Mean and Maximum rates (cells E14 – L17) showing hstorical information for the SWR (cell B10) or historical information for Target Withdrawals (% p.a.) (cell B17)?

    Withdrawal Rates All Since 1926 1929-60 1965-99 1970-2009 1999-curr. 2007-curr.
    Minimum 2.94% 2.94% 3.25% 2.94% 2.94% 2.94% 3.36%
    Mean 5.21% 4.95% 5.18% 5.49% 5.28% 3.96% 4.11%
    Maximum 11.41% 11.27% 11.27% 9.52% 9.52% 6.24% 6.24%

    Thanks in advance!!

    Reply

  18. Big ERN,

    So a real concern! First, thank you so much for diligently updating the SWR spreadsheet and your adj-CAPE data. But what happens when you decide to stop the updates??? How would you suggest we continue to leverage the SWR worksheet if the data and CAPE are not being updated? If we plan to retire early and leverage your hard work, how would this work down the road? I know if might seem fairly easy for you to find and update, but I don’t believe many of us would know where to start. Thoughts??

    Thanks again!!!
    Brandon

    Reply

    1. I’m glad you like my series. Let me assure you, I will update the data regularly. I would never just shut down the site and go away. In the worst possible case, I will hand over the responsibility to a confidant who will continue this work. So, his tool will survive long-term.

      Reply
  19. Pingback: Can we increase the Safe Withdrawal Rate with Small-Cap Value Stocks? – SWR Series Part 62 - Early Retirement Now
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  22. Love your work! Thank you. I’ve searched your archives and watched the Two Sides of FI tutorial on the SWR tool. However, I can’t seem to find answers to some very simple questions that vex me.

    1. Is the safe consumption rate and amount before or after taxes? It would be great if that was called out in the tool results somewhere on the online tool results page.
    2. Is the Final Value Target supposed to be in current dollars or future dollars? Again, a little tool tip next to that box on the online tool would be very helpful.

    Thanks so much for all that you’ve done.

    Reply

    1. 1: before taxes. Taxes are too idiosyncratic, so if you don’t input your tax parameters (cost basis, distribution taxable vs. Roth vs. IRA, etc.), you can tell that this is all gross, not net of taxes. You need to apply a haircut to account for your personal effective tax rate.
      2: all CPI-adjusted. Here and elsewhere: unless otherwise stated, everything is always CPI-adjusted. It wouldn’t make sense to use nominal dollars.

      I added comments in the Google sheet to clarify both issues.

      Reply

  23. Hi ERN, thank you so much for the SWR series, I’ve found it really educational, and the SWR tool is a so useful in taking your findings an applying to my own situation. Maybe you have covered this somewhere already, but if not, can I make a suggestion for a post? When I stop work I will (hopefully) still have a few years to go before I can access my SIPP here in the UK (this is a tax-beneficial wrapper for retirement funds, I’m sure you have something similar in the US?).

    So I’ve been playing with the SWR tool to see what impact it has if you measure the value of your portfolio at the point you stop work and set off on your rising glidepath, but don’t actually withdraw for the first x years (in my case probably 2-5). I modelled this by getting a basic SWR and then adding that amount back as an annual cashflow (so as if you’re taking the drawdown but then re-investing it) for the first x years, getting a new SWR, adjusting the cashflow amount iteratively until it settled on a stable SWR. I’m finding that it adds a really significant amount to the SWR – for example with my figures, it goes from around 4.1% SWR if I start withdrawing immediately to 4.5% if I wait 2 years, to 5.2% if I wait 5 years!

    Obviously you need to have other funds available outside of your tax-beneficial accounts to pay your expenses until you start to withdraw but I’ll need to do that anyway since I can’t access the tax-beneficial funds until a fixed age.

    Have you ever investigated what the impact of waiting a number of years before starting to withdraw is on the SWR?

    Thanks so much!

    Reply

  24. Curious on SWR for someone retiring early using SEPP withdrawals. During market downturns there is no ability to change withdrawal rate, unless you change to RMD which would lock you in until 59 1/2. This would represent a 33% drop from a 3.5% withdrawal rate for someone retiring in their 40’s. That’s a tough pill to swallow if you still have 15 years left before you can alter your withdrawal rate again! Much rather use a safer withdrawal rate to prevent this possibility. Part 3 leads me to believe 3.25% should be sufficient though.

    Reply

    1. Yeah, the SEPP have some pitfalls. For very early retirees, you should probably not exceed 3.25% or 3.5% anyway.
      Another solution is to do a 5-year Roth ladder. But that takes too much time for most folks.

      Reply

  25. Hi Karsten! Thank you for your knowledge and an amazing tool! I am hoping you can clear up some confusion on my part. I understand on the ‘cape based rule” tab, the withdraw amount cell includes both funds from the portfolio and what is entered on the ‘can flow assist tab’. My confusion is on the ‘parameters main results’ tab and ‘cash flow assist tab’. Do those calculations include cash flow assist figures. Example, on the ‘cash flow assist’ tab, columns U-Z, starting on row 15…the “safe consumption amounts….” dollar figures. Do those dollar figures include what is on the cash flow assist tab or is that only what is coming from the portfolio? Would you take those dollar amounts plus add the supplemental cash flows to understand what you could withdraw? Thank you!

    Reply

    1. The SWR calculated in that tab takes into account the supplemental cash flows. in that sense, the sheet only calculates a safe CONSUMPTION rate. So your withdrawals would be that amount minus the supplemental flows. If you have positive cash flows you’d withdraw less. If you entered negative cash flows you’d withdraw more.

      Reply

      1. To ensure I’m following, is this correct? Example: the dollar amount for safe consumption on the ‘cash flow assist’ tab (0% failure) says $100,000. I have an additional $20,000 per year entered on the ‘cash flow assist’ tab, positive number from a side business. Would the safe consumption amount be $100,000 or $120,000? I believe the correct answer is $100,000 and that includes the supplemental cash flow but wanted to confirm.

        What I’m trying to make sure I understand is the seemingly large difference between the safe consumption amount on the ‘cash flow assist’ tab and the target withdrawal on the ‘Cape based rule’ tab. In this example, $100,000 is around 0% failure rate but the ‘cape based rule’ tab shows an annual target withdrawal of $140,000 which is closer to the 50% failure rate. I understand the Cape base rule tab withdraws change but just wanted to ensure I’m thinking about this correctly. Thank you again!

        Reply

        1. 1: If the safe consumption is $100,000 you’d withdraw only $80,000 in the years when you have $20,000 in positive cash flows.
          2: The CAPE-based figure is higher. But it can also drop precipitously (possibly 50%) if the portfolio drops by enough. You’re trading off tability vs. initial WR.

          Reply

  26. This Safe Withdrawal Rate series looks incredibly valuable for early retirement! It’s fantastic you’ve dedicated 60+ posts to transforming portfolios into sustainable income streams. Creating this accessible landing page is a brilliant way to share your extensive research. I’m excited to explore this resource!

    Reply

  27. Can anyone help me as I cannot remember reading the answer to this probably stupid question. What exactly is the 10 year treasury data that is used? What duration does it have? Is it issue day based and therefore 10 years or does it have a shorter duration reflecting the population of 10 year Treasuries that have been issued?

    Reply

    1. The 10-year series is the 10-year benchmark bond with exactly 10 years to maturity (give or take a few weeks).
      What do you mean by duration? In finance, duration is a mathematical construct different from the maturity. A 10-year bond probably has a duration of about 7-8 right now. But the duration changes depending on the interest rate.

      Reply

  28. Your post on such an interesting subject has left me speechless. I regularly check out your blogs and stay current by reading the material that you offer; nevertheless, the blog that you have posted today is the one that I appreciate the most.

    Reply

  29. With 30 year TIPS now having a real yield of 2.6%, are you at all tempted to incorporate them in your portfolio?

    Does it make sense to use them to replace bonds in an optimum SWR portfolio?

    Any plans to do an SWR entry on how such TIPS might improve SWRs?

    Any chance you can do a tweak to the Google sheet to make it easier to incorporate TIPS in the analysis without having to manually subtract from your assets and enter as individual monthly cash flow lines?

    Reply

    2. I won’t need them personall. But I have recommended them in Part 61.
      In a short enough retirement (e.g., standard 30 years) you should use more TIPS.
      Over 50 years? It gets harder to move the needle much with TIPS.

      Reply

  30. Ive been thinking alot more about private equity investment options and how they might play a role in diversifying risk of a shrinking public market over the long term. Not sure if you have written a post on this subject along with the pros and cons?

    Reply

    1. I don’t think private equity only works in special situations, i.e., real estate syndications. Other PE is usually not recommended for retail investors. You’d normally get the crappy investments that nobody else wants and that are dumped onto the retail sector.

      Reply

  31. I have probably missed this along the way, but once one is in retirement, should the ERN SWR worksheet be updated (Retirement Horizon and/or Portfolio Value) or should the SWR amount achieved at time of retirement be locked in and that amount withdrawn (adjusting annually for inflation)? I don’t know if the worksheet is meant to be “dynamic” with changing values based on the aforementioned inputs or a “snapshot” that provides necessary initial guidance and that’s it?

    Reply

      1. Thanks. I’m not as concerned about that SWR decreasing, as once it’s established, that becomes the floor. Actually, concerning such a floor, I found the research here about drawdowns illuminating and might align with your thoughts around CAPE and S&P levels:

        https://www.financialplanningassociation.org/article/journal/NOV20-safely-boosting-retirement-income-harmonizing-drawdown-paths

        I do think that periodically updating would serve to probably increase the SWR amount assuming typical market behavior. I don’t think one’s SWR amount would necessarily decrease due to the information found in the cited link. Would appreciate your thoughts regarding.

        Reply
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  33. What are your thoughts on replacing part of the bond portion with some of the more recent covered Call funds or CEFS that are paying ~10% yields?

    I realize that with some of the covered Call funds you are at risk of potential NAV erosion (although some of the newer ones seem to be a little better at managing this) and some decline in premiums when the share price is down.

    My thinking is that you could use some of the income from these to lower the amount you need to withdraw from equities during a bear market, and then in bull markets you could withdraw more from equities and just re-invest the Distributions from these funds?

    Curious on your thoughts, given the less than rosy future outlook for bonds?

    Reply

  34. Been with you diligently since 2017. Know that all our results here are based on historical and eschew Monte Carlo Sims. Never the less I am curious on your take of the the variable probability, floor/ceiling adjustments developed by Derek Tharp and sold to advisors at “The Income Lab” which appears to be based on maintaining an 80% MC success rate as the market moves (and built so more naive clients don’t over react to their MC rate dropping quickly day to day) Similar to Guytyon Klinger, but not based on market returns but rather portfolio value. https://incomelaboratory.com/?

    Reply

    1. I’ve seen the presentation by Aubrey Williams (not in person but his talk at CampFI via YouTube): https://www.youtube.com/watch?v=-_UtH2WCt2E
      I’ve also talked with Aubrey about this methodology.
      The problem with this approach is that Projection Lab creates garbage simulations because their “worst-case scenarios” aren’t really the worst cases. Their 1929 simulation doesn’t start at the market peak (8/31/1929) but half a year before that. So, the cut in the retirement spending is much more benign than for the 8/31/1929 cohort. If you did a proper simulation of this guardrail strategy, you’d find some pretty unappetizing retirement budgets along the way. Why Projection Lab does that is a mystery to me.
      I haven’t tried this on Income Lab because I don’t have a subscription for it, but I fear they use a similar misleading simulation.

      So, in summary, this guardrail approach is a lot of noise about nothing. I prefer the CAPE-based rule because it gives you explicit guidance on both initial and subsequent SWRs. you can also now simulate the path in my toolkit. See the new Case Study Tab.

      Reply

      1. The Income Lab product does allow for one to conduct historical analysis based on a starting month (e.g., Aug. or Sept. ’29) vs. confining to start of year(s).

        Reply

          1. The Income Lab product uses a “guardrails” approach, allowing a certain monthly level of withdrawal from one’s portfolio (taking current/future revenue such as SS and pensions into account) with an increase allowed if the portfolio level above a certain point and a decrease if the portfolio drops below a certain point. As such, the historical assessment performed only ensures that initial monthly level could be maintained throughout one’s retirement if it has started on a certain date. So, spending wouldn’t have been reduced, but, it wouldn’t have increased either.
            Now, unlike VPW and other tools, Income Lab doesn’t necessarily attempt to end with a depleted portfolio (if one has selected this as the desired end goal). It seems to behave more like Boldin and, I’m guessing Projection Lab, in that more often than not a significant amount remains at the end of one’s longevity period.

            Reply

            1. Noted. I just wonder what are the withdrawal paths for a 4% initial WR if you start at the peak of the 1929 market, 8/31/1929? What if you followed the advice that with flexibility you can raise your WR to 5% initial?

              In ProjectionLab you can’t do that because they sneakily use the, I believe 4/30/1929 start date for their case study.

              Reply

              1. We can simulate this exact scenario (30-year retirement, 80% stocks) using the tool Aubrey mentioned: https://tinyurl.com/1929-worst-case (scroll down on the left and press Run Simulation)

                Withdrawal never reaches that 5% initial; instead it drops dramatically to less than half the original level, then recovers a bit and stays at around 2/3 for most of the duration. Wouldn’t be a very pleasant situation for any retiree, but at least the portfolio survives the 30 years while the fixed 4% withdrawal doesn’t (see the gray line).

                Reply

                1. Correction: I misinterpreted the output; the withdrawal does actually increase to that 5% level right off the bat, because the upper guardrail (due to good market performance from 1871-1929) is so low that it hits it right away.

                  It stays at 5% until late 1930 when it hits the guardrail twice and dips to near the original 4%, prior to dipping further into the 2% range, before recovering into the 3’s, but still not climbing above 4% IWR again until 1954 (at which point the fixed 4% WR has already gone to zero).

                3. Thanks for confirming! That’s very much in line with my expectations. As I mentioned elsewhere: it’s a bit like squeezing a balloon: you start with more than 4%, but then you might do much less than 4% for a while.

              2. Which case study are you referring to? Are you possibly confusing IncomeLab with ProjectionLab? ProjectionLab uses data for the entire calendar year.

                Reply

      2. I am curious where you found the worst-case scenarios in ProjectionLab, e.g. 1929 simulation? I can’t find any reference to this feature.

        Reply

        1. From one (assuming you have multiple scenarios) of your plan’s dashboard view, look for “Historical Analysis” and click on that.

          Reply

      3. I looked deeper and I guess I answered my own questions. It appears the Income Lab only automates client communication reporting for advisors and they use a simple “Risk Based System” that attempts to preserve/return an 80% or 90% Monte Carlo success rate as portfolio fluctuates and horizon shortens. White paper can be found here: https://www.kitces.com/blog/probability-of-success-driven-guardrails-advantages-monte-carlo-simulations-analysis-communication/, and here: https://www.kitces.com/blog/retirement-income-profile-guardrails-spending-risk-curve-visualization-estimate-adjustments/. Nothing really new here. It simplifies through ratcheting. No subscription actually needed. A DIYer could replicate its suggestions simply by watching the MC output in Right Capital or anything else with an MC output. And yes. It does have samples for “how great it works” for the GD, Stag70’s, Dot-com and GFC.

        Reply

        1. Hi Bruce,

          Regarding Risk-Based Guardrails, you’re absolutely correct that a DIY’er with a historical analysis tool such as the ERN SWR Toolbox can replicate what IncomeLab does. This is what I did my best to demonstrate in the talk I gave (ERN linked to above).

          As you said, it sets an initial spending level at whatever Chance of Success you define, 90% for example, and then the upper and lower guardrails are also defined in terms of Chance of Success.

          These upper and lower guardrails Chance of Success % define an upper guardrail portfolio value and lower guardrail portfolio value given the initial spending value at those Chances of Success. You then solve for the new spending that would restore the original Chance of Success, and that is the new spending level.

          IncomeLab has some additional parameters that are used such as “% of full adjustment” and “minimum adjustment %”, as well as “spending floor” and “spending ceiling” that can be set.

          There is nothing magic about it, it is doing historical analysis (or Monte Carlo, or regime-based Monte Carlo) to set initial spending, guardrails, and models spending adjustments over time.

          The “Retirement Stress Test” screen does use fixed dates, and I can’t say why they chose these. Maybe they consider these “official” start dates of these economic events, maybe they were cherry picking.
          Great Depression – 04/1929
          Stagflation – 04/1968
          Dot-Com – 03/1999
          GFC – 11/2007

          You can get worst case scenarios in the Dashboard/Test Plan, but they are not called out with dates.

          Not being able to configure simulation start dates is a big miss, and I wanted to be able to configure everything and create whatever parameters I wanted, so I helped developer Roger Cost create a FOSS Risk-Based Guardrails tool, which you can check out here: https://fire-guardrails.streamlit.app/

          And here is the GitHub page with the open source code: https://github.com/rogercost/fire-guardrails/blob/main/streamlit_app.py

          It is still very much a work in progress, so feedback is very welcome. You can contribute to the code or make suggestions on features in the GitHub Issues area.

          Aubrey

          Reply

          1. Thanks for providing that info!

            I have to shake my head why they picked those specific months when the market peak occurred at very different dates. So, appreciate your work and getting that GitHub project running!

            Reply

            1. Regarding why IncomeLaboratory chose those dates, Hanlon’s Razor comes to mind: “Never attribute to malice that which is adequately explained by incompetence.”

              Whatever the reason, being able to pick the dates we wish to analyze is a requirement for me.

              All credit for the GitHub project goes to Roger Cost. Consider me an enthusiastic champion and consultant!

              Reply

  36. @HH – No worries! I guess Income Lab has a “Historical Analysis” feature? I don’t think the current version of Projection Lab has that. It does to MC with Historical Data, but doesn’t break out specific stress scenarios like 1929, as far as I can tell. But I’m new to PL, so might be missing something.

    Reply

    1. ProjectionLab absolutely has historical analysis. Under Chance of Success look at Data Sources, pick historical for stocks, bonds, inflation and you’re there.

      Under Methodology it then has some interesting choices on how to perform historical analysis. Here is a list of the current options:
      Historical Random Restart
      Historical Block Bootstrap
      Historical Looping
      Historical No Looping
      Random Start, Random Loopback
      Random Years, Non-Chronological

      And for any of the above that have a random element, you can set the number of trials to make sure the results stability.

      ProjectionLab does not do Risk-Based Guardrails. In commercial software IncomeLab is the only one that does this, but as Bruce points out above, you can do Risk-Based Guardrails in any tool, including the ERN SWR Toolbox, ProjectionLab, etc. using a “guess and check” methodology.

      Aubrey

      Reply

      1. @Aubrey – Thanks. I know ProjectionLab has historical analysis as you described, but it does not have any specific, named historical stress events. It just uses all the historical data it has. I do appreciate that, if the historical data includes all the named historical stress events and the number of trials is sufficiently large, that the stress events will be included implicitly in the MC test results.

        Reply

        1. To get historical stress events by year (not by month), go to Chance of Success, change Methodology to “Historical, No Looping”, then after it runs scroll down to see “Trials by Start Year”. You’ll see the years tested and you can click on “Trial 1” to see “1928-19xx”, and you can see Net Worth over time, Withdrawal Rate, etc.

          Reply
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  38. This is an incredibly helpful series overview! I really appreciate the distinction between simply accumulating assets and the complexity of the withdrawal phase.

    Reply
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